Markets

Daily market wire 10 April 2018

Lachstock Consulting, April 10, 2018

Overnight futures markets

 

  • CBOT wheat up 17.5c to 506c,
  • Kansas wheat up 16.25c to 541.75c,
  • Corn up 2c to 399c,
  • Soybean up 12.75c to 1057.5c,
  • Winnipeg Canola down -0.599$C to 536.7$C,
  • Matif canola down -2.5€ to 350€.
  • The Dow Jones up 46.34 to 23979.1,
  • Crude Oil up 1.27c to $US63.33 per barrel,
  • AUD up to 0.769c,
  • CAD down to 1.271c, (AUDCAD 0.978)
  • EUR up to 1.232c (AUDEUR 0.624).

Wheat

 Wheat weather has gotten to a point where shorts can no longer justify their positions. Short covering was the major driver today, after extremely cold temperatures in the US over the weekend threatened winter wheat yields. On top of this cold wet temperatures in the north plains have increased snow coverage, decreasing the likelihood of spring wheat acres going in, particularly in the volumes that the USDA are calling for. State crop conditions were down 2pc;  30pc rated good to excellent.

Implied volatility in May Soft Red Winter wheat futures went out at 31.25pc. The market is not expecting any major surprises from the April wheat stocks report.

Looking ahead, the forecast is not calling for any significant moisture in Hard Red Winter wheat areas over the next ten days.

In Europe prices were stronger, while Russian values remained around US$213/t free on board, despite a big drop in the Ruble.

Soybeans

Soybeans finished stronger with good strength coming from Asian markets. The US government toned down its language regarding tariffs.  Markets await a speech from the Chinese President who is expected to speak on tariffs before today’s open.

Board crush margins continue to strengthen.

Soymeal up $3.30 per tonne while soybean oil was unchanged.

Weekly export inspections came in at 373,900t.

USDA report out tomorrow will announce April 1 US stocks and revised South American production forecasts. Bean stocks are expected at 15.6 million tonnes (Mt). The potential in beans is the revision in Argentina’s production. Local estimates have been well below the USDA and the market is expecting the USDA to lower their current forecast by 4.3Mt to 42.7Mt

Corn

Corn found support from beans, wheat and ongoing potential for lower acres due to cold wet temperatures in the major production areas.

Export inspections are calling for strong numbers this week, coming in at 1.937Mt.

The USDA is expected to increase April 1 US stocks higher to account for a reduced amount of local feeding. The market is expecting an increase of 1.57Mt to 55.6Mt.

In South America the market is expecting an Argy crop of 33.7Mt, down 2.3Mt from the last USDA estimate. In Brazil conditions have been too dry for the safrina corn crop, prompting expectations of 92.7Mt for their corn crop, 1.8Mt below the USDA’s March forecast.

Australia

Aussie markets were well bid yesterday as the perfect storm of a stronger futures market and limited local sellers saw the trade returning most of the move in an effort to uncover liquidity. The forecast is calling for 10-15mm with in the 4-8 day for some parts of NSW and Vic, though the coverage is not yet convincing. It’s unlikely that this will pressure prices before it eventuates.

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